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ART Business Loans

ART - CITR Withdrawable Shares

Risk factors

All investment and commercial activities carry risk, and investors should consider whether ART's 2019 share issue is a suitable investment for them in light of their own personal circumstances.

This offer is not covered by the Financial Services Compensation Scheme.

General investment risks

General risks include:

An investment in community shares is an investment in a trading business, not a loan or a deposit. Your shares are withdrawable after 5 years, but are at risk so having your money returned cannot be guarunteed.

As a member and shareholder of ART you could, if ART is unable to meet its debts and other liabilities, lose some or all of your investment held in shares. However, your liability is limited to the amount that you have paid for your shares.

Your investment may receive a Tax Relief but does not enjoy any capital growth.

Compensation Scheme

ART is not an authorised institution under the Financial Services and Markets Act 2000 or deposit protection scheme for investors. The withdrawable shares are a risk investment for the purpose of the relief of poverty through the promotion of enterprise. The issue of shares by ART does not constitute an offer to the public under section 85 Financial Services and Markets Act 2000 since it is not an issue of transferable securities nor is it a controlled investment by virtue of paragraph 16(3) of Schedule 1 of the Financial Services and Markets Act 2000 (Financial Promotion) Order.

Note that the shares are not tradeable and the full value would not be returned if the risks to income described below were to materialise.

ART has a strong balance sheet and income from its existing loan book. It has always paid back money invested or lent in accordance with the relevant terms of its facilities and will take any commercially practicable steps to protect the investment made under this share offer.

Bad Debts

The nature of ART’s borrowers provides a high risk of default and irrecoverable debts. All forecasts have been made in line with an average bad debt rate over the last five years of 16%.

The Directors will seek to mitigate these risks through prudent management policies in ART.

ART has established loan procedures that will seek to target bad debt write-offs at a figure which will be covered by income generation on the loan book and the Enterprise Finance Guarantee scheme.

ART also has funds available in its wholly owned subsidiary company (Aston Reinvestment Guarantee Company Limited) to provide some cover in the event of any shortfalls.

Insufficient Revenues

ART has generated from its loan book sufficient funds to cover all ordinary and anticipated overheads, except bad debts, for a period of over 8 years. Bad debts incurred have either been covered by surplus generated or grants received from public sector support, eg the Regional Growth Fund. If insufficient capital funds were available ART Directors would fully review lending plans and credit policies.

Lending stalls

Demand for loans from businesses unable to meet the lending requirements of the banks is strong across the West Midlands.

ART has an experienced team who would increase the networking and marketing to small businesses should it appear that the money was not being lent in a timely manner.

CITR accreditation

ART will seek to ensure that its lending activities from amounts invested through this share offer meet the terms and conditions of accreditation and the tax relief by regularly monitoring compliance against those terms and conditions.

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